A new Minister-led taskforce will help pension schemes address
the risks and seize the opportunities of the “social” element in
ESG investing.
Social factors can include issues ranging from workforce
conditions and supply chains to community engagement, consumer
protection and modern slavery, among others.
The taskforce – led by the Minister for Pensions – will support
pension scheme trustees and the wider pensions industry with some
of the challenges around managing social factors, including the
identification of reliable data and metrics.
Minister for Pensions said:
I’m proud of the progress we have made in bringing environmental
and climate issues up the pensions agenda, but climate change
should not be trustees’ sole consideration.
Financially material social factors also pose risks and provide
opportunities to schemes’ investments, and our taskforce will
help ensure that focus on social factors continues to grow among
pension schemes and throughout the investment chain.
The UK is already a world leader in tackling climate risk. From
October this year, 80% of UK pension scheme members will be
invested in schemes measuring and publishing how their
investments support the Paris Agreement climate goal of limiting
global warming to 1.5 degrees Celsius above pre-industrial
levels.
The responses to the Government’s Consideration of social risks
and opportunities by occupational pension schemes Call for
Evidence highlighted the need for a proactive approach to
embedding social factors within pension schemes’ investment
decisions and stewardship policies.
The new Minister-led taskforce will help identify reliable data
sources and useful resources for pension schemes to assess and
manage financially material social risks and opportunities. This
work will contribute towards the development of wider principles,
standards, and metrics.
To further drive progress in this area, DWP continues to
encourage pension schemes to join the Occupational Pensions
Stewardship Council – an industry-backed forum working to move
the dial on stewardship through collective engagement and sharing
best practice.
Additional information
- The taskforce will be a Minister led, cross-department
working group, with invitations extended to financial regulators.
The full consultation response - Consideration of social
risks and opportunities by occupational pension schemes, can
be found on Gov UK.
